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Piracy rates are the highest in developing nations

Piracy in the digital goods market runs rampant. Music piracy is what typically comes to mind when many consumers think piracy, but software is one of the categories that is targeted by pirates the most. The reason is that software like Windows operating systems and Office productivity suites are desired by many, but the high price puts them out of the reach of users particularly in developing nations.

A new joint report from the Business Software Alliance (BSA) and research firm IDC has found that losses to software companies from pirated products have topped the $50 billion mark for the first time ever.

According to the report, headway against piracy is being made by companies, law enforcement officials and governments, but in some areas -- like the U.S. -- anti-piracy efforts have stalled. The sixth annual BSA-IDC Global Software Piracy Study found that in 2008 the PC software piracy rate dropped in 57% of 110 countries included in the study. Nearly a third of the countries studied found that the software piracy rate remained the same.

The study claims that the worldwide piracy rate rose for the second year in a row moving from 36% to 41%. The rise in global piracy is mainly attributed to PC shipments growing the fastest in countries like China and India where piracy is much more rampant. China has recently cracked down on software pirates and convicted 11 for pirating Microsoft software.

BSA President and CEO Robert Holleyman said, "The bad news is that PC software piracy remains so prevalent in the United States and all over the world. It undermines local IT service firms, gives illegal software users an unfair advantage in business, and spreads security risks. We should not and cannot tolerate a $9 billion hit on the software industry at a time of economic stress."

EWeek reports that the study does note that the global recession has affected the piracy rate to some extent. IDC chief research officer John Gantz said that consumers are keeping old computers longer in the current economy and consumers that hold onto old computers are more likely to install pirated software on the machines.

Gantz said, "Reduced buying power is only one of many factors affecting software piracy. The economic crisis will have an impact – part of it negative, part of it positive – but it may not become fully apparent until the 2009 figures come in."

The positive aspect according to Gantz is that the reduced buying power of the average consumer has them looking at netbooks, which are often bundled with legitimate copies of software. IDC predicts that the piracy rate will only increase with 460 million new internet users coming online in emerging markets over the next five years. These emerging markets are where piracy is most rampant with as much as 90% of software installed on computers being pirated versions.

The countries with the lowest levels of piracy according to the study were the U.S., Japan, New Zealand, and Luxembourg -- all with piracy rates near 20%. The countries with the highest percentage of piracy included Armenia, Bangladesh, Georgia, and Zimbabwe -- all with piracy rates over 90%.



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RE: Not Lost Sales
By LRonaldHubbs on 5/12/2009 2:25:15 PM , Rating: 3
quote:
I see what you are saying here, but I can't fully agree. My example for this being college and HS students that are required to have MS Office. Have you seen the price for that software and been on a college budget? If so, then you know why people are pirating.

There is a degree of truth to this. However:

1. Office Home & Student costs $100, a drop in the bucket compared to college expenses.
2. Many universities offer free solutions, such as a license that can only be activated once. These options are not always advertised, but if you talk to a professor who requires such software they can't point you to it.
3. Schools have computer labs everywhere. Students don't need their own copy of Office.
4. Alternative software like OpenOffice, StarOffice (basically the same), or Lotus Symphony, while far from perfect, are free and also adequate for the vast majority of users.

I know where you are coming from. I graduated exactly a year ago, and I used bootleg Office 2003 throughout college. But the general reasons for piracy that I witnessed as a student were not cost but convenience and apathy. Let's be honest here, nobody, not a single person anywhere, needs to pirate Office. They do simply because they can.


RE: Not Lost Sales
By RandallMoore on 5/12/2009 2:31:16 PM , Rating: 2
quote:
3. Schools have computer labs everywhere. Students don't need their own copy of Office.


I knew that someone would say this. I think there are others that can agree that time spent working in the comfort of your own home, on your own computer is WAY different than trying to get work done in a public place. Access to the software needed is available (theoretically) for free, but they are not even close to what you need to get the job done in the best manor possible for the best grade.


RE: Not Lost Sales
By peritusONE on 5/12/2009 2:37:37 PM , Rating: 3
quote:
I knew that someone would say this. I think there are others that can agree that time spent working in the comfort of your own home, on your own computer is WAY different than trying to get work done in a public place. Access to the software needed is available (theoretically) for free, but they are not even close to what you need to get the job done in the best manor possible for the best grade.


But the fact of the matter is that it is available. If you are going to college and spending hundreds and thousands of dollars on textbooks and such, but can't shell out $100 for a copy of Office if needed, then you have bigger problems than the cost of an optional purchase.


RE: Not Lost Sales
By StevoLincolnite on 5/13/2009 12:20:37 AM , Rating: 2
I paid nothing to go to college and I paid nothing for the text books, I was actually having a discussion with a friend over in the USA and I was amazed at the costs for trying to farther your education over there, It's great going to college, but I don't believe you should end up in debt for half your life in order to do so.


RE: Not Lost Sales
By keith524 on 5/12/2009 2:47:30 PM , Rating: 2
Doesn't that kinda prove the point of the OP? If you argue the student would use the lab before buying the software then the company has not lost any money if the student pirates the software.


RE: Not Lost Sales
By BadAcid on 5/12/2009 3:57:59 PM , Rating: 2
If they pirate, they don't use computer labs. Unused computers don't get replaced when they update the labs, and so fewer office licenses get purchased when the school's get new licenses.


RE: Not Lost Sales
By Hvordan on 5/12/2009 4:11:42 PM , Rating: 3
The OP argues that because their estimate of lost revenue is flawed we should not take them seriously. I'm not sure I understand what the point of that argument is. Clearly there is an impact to the developer who created the pirated software, there is an impact to developers in the same field who have reduced opportunity to compete, there is an impact to the customers that have to float costs associated with fewer paying customers.

The monetary estimate itself may be flawed, but the claim that there is piracy has no impact on software developers in general is absurd.


RE: Not Lost Sales
By LRonaldHubbs on 5/12/2009 2:48:57 PM , Rating: 2
I agree, working in my own dorm is very beneficial luxury. It is not, however, a necessity. The point is that there is a free alternative, thus cost is not the motivator for piracy in this case.

quote:
Access to the software needed is available (theoretically) for free, but they are not even close to what you need to get the job done in the best manor possible for the best grade.

This is entirely contrary to my college experience. Can you back that up with at least an example?

At my college, which was pretty small (~3000 kids graduating class), every single computer in every lab had a fully-featured copy of Office. They also had Matlab, SPICE, Pro-Engineer, and various other engineering tools on every computer in the engineering buildings. This was not a rich school by any means, yet everything that was needed for the coursework was provided.


RE: Not Lost Sales
By RandallMoore on 5/12/2009 5:14:28 PM , Rating: 2
The theoretical part was for college and technology fees. The university that I attend has no special discount for any software btw.


"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone

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